Abstract
This study intends to econometrically determine whether earnings of employees, of financial
intuitions in Lahore-Pakistan, are affected by their education only or by some other factors.
Primary data through a questionnaire were collected from a sample of 455 employees. There
results reveal that the main determinants of employee’s earnings in financial institutions are
education, experience, computer literacy, gender, nature of job, family background and family
status. The concavity in experience-earnings profile is found. Higher returns coupled with
education, experience, and computer use variables provide a clear support to Human Capital
theory. The returns to education for entire sample is found to be around 12 percent. The
returns to education for the employees of Punjab Provincial Cooperative Bank is found to be
the highest (15.4 percent) among all. Public sector financial institutions, on average, are
paying more to their employees as compared to their counterparts in private sector. Work
experience is found to be the most important factor for the earnings of the employees of each
category of financial institutions. Those who intend to join Islamic Banks like Meezan Bank
must have sufficient work experience, computer literacy and family background and family
status. The policy makers of financial institutions are suggested to formulate such salary
structure that would help in eliminating the earnings differential for the employees of Islamic,
Schedule and Government’s banks.
Muhammad Afzal, Ishrat Begum, Hina Fatima, Kafeel Sarwar. (2015) Private Financial Returns to Education for Employees of Financial Institutions in Lahore: Microeconometric Analysis, Journal of Elementary Education, Volume-25, Issue-1.
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